NATIONAL 6 -(Spotlight Weekly)]

See You Again

Officials of both the countries fail to reach into an agreement

By A CORRESPONDENT

With only two weeks left for the expiry of the extended deadline of the bilateral trade treaty, officials from Nepal and India met in Kathmandu to discuss the issue. But the meeting ended inconclusively Tuesday, as they could not reach into a common position. Both the sides have now agreed to meet sometime next week in the Indian capital.

Though expectations were high regarding the renewal of the treaty, the fifth round of talks too remained entangled on various technical issues including value addition, rules of origin and export surge, officials said.

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According to a senior official at the Ministry of Industry, Commerce and Supplies, Nepal proposed 20 percent value addition in the goods that India has categorized under the ëexport surge.' Indian officials, however, insisted that the value addition should be at least double of what Nepal had proposed.

Officials said the issue of imposing quantitative restriction on those items enlisted in the export surge by the Indian side was also discussed during the talks. The Indian side has been raising the issue of export surge of five items: copper wire, steel pipe zinc oxide, vegetable ghee and acrylic yarn. These five items together constitute nearly 20 percent of Nepal's total exports to India. The Indian side also raised the issue of revision in the provision of providing certificate of origin that is presently being issued by member associations of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

Sources said the treaty is likely to be renewed within March 5 this year as Nepalese and Indian officials have narrowed down their differences. A high level official at the Indian Embassy, too, expressed confidence that the agreement would be renewed. An understanding related to imposition of an across the board value addition on all Nepalese products at the range of 30-35 percent and annual quota for the products identified by India under ëexport surge' is likely, sources said.

The issue surfaced in the backdrop that the Vegetable Ghee Producers' Association in both the countries had already agreed to allow up to 120,000 tonnes of vegetable ghee to be exported to India from Nepal under the duty free arrangement.

Nepalese business community has expressed worries about the inconclusive trade talks. The five industries identified by India have already scaled down their productions and have reduced the level of imports of their raw materials, reports said. "In order to do away with present confusion, we urge both the governments to renew the treaty within March 5 this year, taking it up at the political level, if necessary," said Rajendra K. Khetan, second vice president and spokesman of the FNCCI.

Other Nepalese businessmen have expressed that instead of arguing over the same matters, Nepalese side could bargain with their Indian counterparts for the greater good of country's economy. They also expressed dissatisfaction over the lack of homework on the part of Nepalese negotiators.

The eight-member Indian delegation, led by Commerce Secretary Dipak Chatterjee, had arrived here Sunday to take part in the talks. The Nepalese delegation was led by Secretary at the Ministry of Industry, Commerce and Supplies Bhanu P. Acharya. "Agreement or disagreement over just one issue cannot decide the fate of the treaty. It's a whole package and we need to discuss more," said Acharya, after the talks ended. Added Purushottam Ojha, joint secretary at the Ministry, "the negotiation over some issues has narrowed down but no agreement was reached." The officials did not give details.

The bilateral trade treaty of 1996 was extended for three months after it expired on December 5, 2001. The treaty has the provision of automatic renewal for the next five years until either side objected to it. The officials from both the countries have sat for five times in as many months after India notified Nepal of its reservations on some articles in the treaty last year.